{"code":"INS","codeName":"Insurance Code","section":"1242","citation":"Ins. Code, § 1242","status":"in-force","lawOn":"2026-09-28","headings":[{"name":"DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100. - 1879.8.]","url":"https://blackletter.si/insurance-code/division-1"},{"name":"PART 2. THE BUSINESS OF INSURANCE [680. - 1879.8.]","url":"https://blackletter.si/insurance-code/division-1/part-2"},{"name":"CHAPTER 2. Incorporated Insurers [1140. - 1260.]","url":"https://blackletter.si/insurance-code/division-1/part-2/chapter-2"},{"name":"ARTICLE 6. Foreign Investments [1240. - 1242.]","url":"https://blackletter.si/insurance-code/division-1/part-2/chapter-2/article-6"}],"history":"Added by Stats. 2008, Ch. 129, Sec. 8.   Effective January 1, 2009.","effective":"2009-01-01","html":"<p>(a) (1) Except as otherwise specified in Section <a href=\"/ins/1241\">1241</a>, a domestic insurer shall not acquire directly or indirectly through an investment subsidiary, an investment under Section <a href=\"/ins/1241\">1241</a> if, as a result of and after giving effect to the investment, the insurer would hold more than 3 percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person, or 5 percent of its admitted assets in investments in the voting securities of a depository institution or any company that controls the institution.</p><p>(2) The 3 percent limitation in paragraph (1) shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.</p><p>(b) A domestic insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under Section <a href=\"/ins/1241\">1241</a> if, as a result of and after giving effect to the investment, the insurer’s aggregate medium and lower grade investments do not comply with the limitations of Section <a href=\"/ins/1196.1\">1196.1</a>.</p>","text":"(a) (1) Except as otherwise specified in Section 1241, a domestic insurer shall not acquire directly or indirectly through an investment subsidiary, an investment under Section 1241 if, as a result of and after giving effect to the investment, the insurer would hold more than 3 percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person, or 5 percent of its admitted assets in investments in the voting securities of a depository institution or any company that controls the institution. (2) The 3 percent limitation in paragraph (1) shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization. (b) A domestic insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under Section 1241 if, as a result of and after giving effect to the investment, the insurer’s aggregate medium and lower grade investments do not comply with the limitations of Section 1196.1.","otherVersions":[],"url":"https://blackletter.si/insurance-code/foreign-investments-1242","source":"California Legislative Information bulk export (pubinfo)"}